A mortgage loan officer, also called a mortgage loan originator, helps borrowers determine if they qualify for a home loan, and, if so, aids homebuyers in finding the right type of mortgage and best interest rate and terms for them.
Throughout the home-buying process, your mortgage loan officer will review your information, collect necessary documentation, and track important milestones leading up to closing.
Mortgage loan officers typically work for a specific bank, credit union, or mortgage company.
In this piece, we’ll discuss what a mortgage loan officer is and does, how to find a mortgage loan originator, the differences between a mortgage broker and a loan officer, and the qualifications of a mortgage loan officer.
Key Points
• Mortgage loan officers assist homebuyers with loan qualification and the application process.
• Officers review applications, set loan terms, and ensure all deadlines are met.
• If working for a specific lender, officers offer a limited range of loan options.
• Brokers, for a fee, help find the best deals from various lenders.
• Qualifications including education, licensing, and registration, may depend on where the officer is working.
What Is a Mortgage Loan Officer?
The mortgage loan process can be nerve-wracking, even if it’s not your first go-around.
A mortgage loan officer serves as a guide to home loans. This individual, sometimes licensed and certified, helps potential homebuyers determine if they qualify for a loan and, if so, which type of home loan is right for them.
A mortgage loan officer is a type of mortgage loan originator (MLO), a regulatory term. An MLO may also refer to a company that does mortgage originations, like a mortgage broker.
What Does a Mortgage Loan Officer Do?
A mortgage loan officer has two main responsibilities:
1. Accept and review mortgage loan applications from prospective homebuyers
2. Work with borrowers to determine loan terms, including interest rates
Of course, mortgage loan officers’ day-to-day duties include much more than these two tasks. In a given week, they might meet with potential borrowers to review their options and explain basic loan definitions, work with underwriters to process loan applications, coordinate with home appraisers to ensure a house is worth what a borrower is offering, and monitor important deadlines for various clients to ensure everything is moving along correctly ahead of closing.
Mortgage loan originators charge a fee for their services. Homebuyers can typically expect to pay this fee as part of their closing costs.
Recommended: How Inflation Affects Mortgage Interest Rates
How to Find a Mortgage Loan Originator
Do you need a mortgage loan officer for a home purchase or refinance? Here are some tips for finding a mortgage lender and loan officer, whether you’re an experienced or first-time homebuyer.
Reading Reviews
Reading about other borrowers’ experiences with particular loan officers and lenders can help weed out the ones you should avoid. Sites like the Better Business Bureau are good resources for customer reviews.
Asking Family and Friends
Online reviews aren’t your only source for feedback. You can talk with friends and family who have recently purchased a home to see if they would recommend their loan officer. If you belong to special groups on social media, like a neighborhood group, you can survey a larger group for recommendations for a mortgage loan originator near you.
Talking with Your Real Estate Agent
Real estate agents work closely with a wide range of loan officers. Your agent may be able to recommend a mortgage loan officer with a good reputation.
Shopping Around
Whether you’re interested in a local bank or an online lender, you have multiple options available. Researching multiple lenders online can help give you an idea of the right mortgage loan originator for you.
Interviewing Multiple Mortgage Loan Officers
When you have narrowed down your list, it’s a good idea to interview a few mortgage loan officers. If you let them know that you’re considering multiple options, they may even feel incentivized to offer you a better deal.
Checking Their License
In some cases, mortgage loan officers must receive formal education, register with the government, pass a licensing test, and take continuing education classes to maintain their license.
You can check a license number through the Nationwide Multistate Licensing System & Registry (NMLS) consumer access site.
Mortgage loan officers at covered financial institutions (those that are highly regulated) are not required to be licensed; they only need to be registered.
Mortgage Broker vs. Direct Lender
If you’re thinking about mortgage shopping, you’ll want to understand the difference between a mortgage broker vs. a direct lender.
A loan officer typically works for a specific bank or lender and can thus only offer you loan options from that institution. At bigger banks, you may only be able to access their loan options through their own mortgage loan officers. Working directly with a loan officer may yield discounts on closing costs or access to better rates.
A mortgage broker, on the other hand, does not directly lend you money. Instead, for a fee, brokers shop around to find you the best deal given your financial situation (credit score, down payment, income, etc.).
Because brokers aren’t tied to a specific lender, they might be able to find you a better deal. But brokers do not have access to every lender, so you still might be missing out on the best deal available.
The fees charged by mortgage brokers may be higher than those charged by direct lenders. If you’re deciding whether to work with a broker or direct lender, ask about all the fees associated with loan generation.
Recommended: Can You Roll Closing Costs Into Home Loans?
What Are the Qualifications to Become a Mortgage Loan Originator?
MLOs may follow multiple career paths, each of which may require different levels of education and licensure.
Education
At a minimum, MLOs need to be at least 18 years old with a GED. Many officers at least obtain a bachelor’s degree, often in business, finance, or mathematics.
License vs. Registration
If you wish to work independently, for a broker, or for a nonbank, you must obtain licensure. A license is also a value proposition to potential homebuyers: It tells them that you have passed a difficult test and commit to continuing education.
If you work for a “covered financial institution,” you will not be required to obtain a license. You’ll simply need to register every year. The financial institution that employs you will likely coordinate this.
To earn your MLO license, you will need to:
• Complete 20 hours of courses, as required by the NMLS.
• Take and pass a state license test.
• Pass the SAFE MLO test. (SAFE stands for the Secure and Fair Enforcement Act, which established guidelines for MLOs after the subprime mortgage debacle, which contributed to the global financial crisis in 2008.)
• Keep up with NMLS requirements, including registration and continuing education.
Characteristics
Beyond the registration or license, a good mortgage loan officer will typically need the following qualities:
• Good with numbers
• Interpersonal skills
• Strong decision-making and organization
• An eye for detail
The Takeaway
A mortgage loan officer helps potential homebuyers find a fitting mortgage, apply for the loan, and meet deadlines. You can interview several mortgage loan originators to see what they offer.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
What are the job responsibilities of a mortgage loan officer?
A mortgage loan officer reviews mortgage loan applications and determines which loans and rates to offer potential homebuyers. The officer works with underwriting on loan approval, then helps the homebuyer through the process until closing.
What is the difference between a loan officer and mortgage broker?
A loan officer, aka mortgage loan originator, typically works for a lender and has access to the best deals of that particular lender. A mortgage broker helps homebuyers shop for the best deal, though they don’t have access to every possible loan.
How do you find a mortgage lender?
To find a mortgage lender, it’s a good idea to read online reviews, ask friends and family for recommendations, talk to your real estate agent about a referral, and shop around online.
Photo credit: iStock/Paperkites
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